New Delhi, May 25 — Government-owned oil firms like Indian Oil, Hindustan Petroleum, and Bharat Petroleum are still facing significant losses, around ₹600 crore daily, despite raising petrol and diesel prices on May 25. This marks the fourth price hike in just ten days.
The recent increases are ₹2.61 per litre for petrol and ₹2.71 for diesel. Overall, prices have jumped nearly ₹7.50 in just over a week after a long freeze on daily adjustments.
Sujata Sharma, Joint Secretary in the Ministry of Petroleum, noted that while global petrol prices have surged by about 22%, India’s increase is much lower, sitting at about 7.7%. The government has taken steps like reducing excise duty on fuels by ₹10 per litre, easing some financial pressure with a projected revenue loss of ₹14,000 crore.
Despite these efforts, oil companies were still incurring losses of ₹1,000 crore daily even after the price hikes. Although the losses have decreased, they remain significant at nearly ₹600 crore per day. Prashant Vasisht, Senior Vice President at ICRA, highlighted that these persistent under-recoveries are partly due to increasing losses on LPG sales and high crude oil prices.
In May, the average import price for oil climbed to $107.84 per barrel, a stark rise from $69.01 in February before the geopolitical tensions escalated. The benchmark Brent crude oil saw volatility as well, dropping to about $90 a barrel mid-April but climbing back up to $126.41 by month’s end amid fears of renewed conflict.
Indian consumers have seen little change in petrol and diesel prices since early April 2022, which has negatively impacted profit margins for public sector oil companies. The government prioritizes meeting domestic fuel needs and will continue to source crude that best fits its refineries.
As fuel prices remain a hot topic, public sentiment is divided. Many citizens express frustration over rising costs, while others understand the global market influences. This ongoing situation reflects the complex dynamics between domestic policy and global oil markets.
